If you own a practice, you’ve probably always expected to sell it one day. However, as Business Development Consultant Julie Leddy outlines, sometimes reality is more complicated than we expect. Julie shares her experience from working with many practices to make the experience as smooth as possible.
Good planning and preparation are the best way to ensure a smooth and successful sale. To help you start your planning, we’ve made a list of things you might like to start considering. Simplyhealth Professionals can also offer support throughout your sale and your preparation. If you need anything, just call us on 0800 828 3223 or speak to your Business Development Consultant.
Your current practice value
The current value of your practice will influence a lot during your sale. Your potential buyers, return on investment and the amount of time you’ll need to prepare will all be affected by your current value.
Your practice value is determined by many factors, like location, patient mix, the ratio between PFPI, NHS and payment plan patients, the lease, and competition in the local area just to name a few. Because there’s so much to consider, Practice Agencies are a great place to turn to establish the value of your practice. Practice Agencies are specialists in practice sales and can provide advice based on their experience, their recent sales and their knowledge of the market.
Increasing your practice value
If you think you’ll need to increase the value of your practice before selling, keep in mind that the process can add 3-5 years to your preparation time.
Any changes that are made to improve the goodwill value or turnover of your practice will take time to become a monetary improvement showing on your financial accounts. Even after they can be seen on your accounts, a bank would then need to deem the improvement stable before it actually increases the sale value of your practice. An improvement needs to show consistently for about 2 years to be considered stable.
You can always turn to Simplyhealth Professionals for help with increasing your practice value. Your Business Development Consultant is available to help you develop and execute your plans for maximising the value of your Goodwill. You can also read our blog on maximising the value of your dental practice for some ideas to get you started.
What happens after the sale?
Whether you’re selling as part of your retirement, planning to become an associate, or moving on to the next stage of your career, you’ll need to make some plans for the life of your practice after your sale is done. Once you feel comfortable, discuss your plans with your practice team, so that together you can prepare the practice for the change, and manage any handover of care.
Simplyhealth Professionals offers effective, confidential support and advice for your sale. We will coordinate any changes to the administration of your Denplan contracts, and can help you communicate with your patients. For more information on the help we provide, take a look at our Buying and Selling a practice pages.
Any method you use to find potential buyers will have its own advantages and disadvantages.
You may wish to approach an associate or co-owner at your practice. Selling to someone already in the practice can make for an easier transition, as they already know the patients and your practicing philosophies. However, an associate may not be in the position to get funding to make the next step to owning a practice.
Again, Practice Agencies will be able to help you find a buyer. As they aren’t familiar with the workings of the practice, these buyers will be keen to come and visit and will want a lot of information regarding the performance of the practice. A helpful source of information for your Denplan list is your Practice Performance Analytics to demonstrate income and patient numbers. You can find these under the Income & Finance tab of your Simplyhealth Professionals dashboard.
Selling to a corporate body is also a potential option. Corporate bodies generally offer a good price for the practice and they have existing funding, which can speed up your sale. The majority of corporate sales require you to stay on as an associate to ensure the continuity of care and service is there for the patients for a few years after purchase. It may be a big change in mind-set to go from owning the practice to working to targets and having less control over the day to day decisions.
If you are an existing member of Simplyhealth Professionals, and aren’t planning to stop work at the practice immediately, have you considered a 50/50 partnership? Simplyhealth Professionals can work with you to help decide if this option is right for you. The success of our Dental partnerships is based on a working relationship between us and our members. By partnering with us you can be confident your legacy will be secured for the future and your patients will receive continuous care. We’ll take care of the succession of your practice so you don’t have to. Please contact your Business Development Consultant if you would like more information about this.